For U.S. airlines in the peak third quarter, y/y revenue growth (8%) comfortably exceeded capacity growth (5%). But that wasn’t enough to lift the industry’s profit margins, which dropped again y/y as total operating costs outgrew both, rising 12%. No matter how successful carriers were in raising fares, charging new fees and squeezing more yield through tighter revenue management, they couldn’t escape the reality that the fruits of these efforts take time to materialize. Fuel prices, by contrast, change immediately.
